The Price of Steem - Where Do We Go From Here? Reflections by Charlie Shrem

That last red candle on the right is the price of Bitcoin when I launched BitInstant. Bitcoin had just hit an all time high of $36 and then crashed to $1.75. It was at $1.75 when I asked my mom for a $10,000 loan to start BitInstant.

Look at the price in the background of the picture below:

Over the next few years, we all know what happened to the Bitcoin price. Price goes up, everyone is happy, price go down and everyone is sad. Price levels out and everyone is bored.

However over time, we need to keep perspective.

Look at what happened to the price of Bitcoin over the next few years.

Now lets look at the current price of Steem. Currently trading at $0.55 or so, after hitting an all time high of around $4.0. I started buying, accumulating and powering up between $0.75 - $0.50, the same strategy I did with Bitcoin.

This is the current chart of the price of Steem. Scary, no?

If you answered yes to that, so did I. Seeing this chart our emotion takes over and leads us to think that Steem is on its way down, so lets think rationally for a second. Don't these two charts look oddly familiar? Steem has over 95,000 accounts at time of writing and traffic has exploded on sites like Steemit. Trading volume is over 500 BTC a day and price has hit support bottoms.

The other day I had a conversation with a self professed "Bitcoin Maximalist", basically someone who thinks Bitcoin is the only way and everything else is a scam.

His argument comes down to "Bitcoin can do it, why do you need another coin?"

My answer to him was that there is no reason other blockchains can't exist that do things differently or better. As Bitcoin.com says "Decentralized social media has been a goal for Bitcoin entrepreneurs for years now. However, the most successful project to date actually has nothing to do with Bitcoin — other than that it uses a blockchain-based cryptocurrency to monetize content."

We forget that all of these new projects, including Steem take their roots from Bitcoin. The Internet we use today, is not the same Internet of a two decades ago. Additionally, if you look at all of the trading pairs, you rarely see USD. Its BTC. All of the new crypto coins and digital software tokens trade on a BTC pair.

So whats next for Steem?

I believe we need more buying pressure for Steem and less volatitlity. There are two ways this can be done:

1- We need markets where Steem/SBD can be used exclusively. This will require people to use, hold, and transaction in Steem and SBD.

2- We need a separation of retail and speculative buying and selling.

Focusing on #2 in this article, I believe we need to separate retail purchases and sales of Steem (Under $1000) and trading.

Right now, the cheapest and fastest way to buy and sell Steem and SBD are on Poloniex and Bittrex. Blocktrades and ShapeShift also offer retail services, but its in and out of Bitcoin.

If Steem is going to appeal to non techies, we need solid on and off ramps to traditional currencies.

When we launched BitInstant, the only way to buy Bitcoin was on exchanges. Over the next year, we were doing 30% of all purchasing and sales at an average ticket size of $300. Most people don't want to use exchanges nor do they know how. If we remove retail purchases from exchange, we will see less volatility and more healthy growth.

There are many people working on #1, but I don't know of many working on #2.

Cheques and Direct Bank-Transfers needs to be an option for REAL investors. When Warren Buffet wanna invest $20 million dollars in direct purchase of steem - well, he´ll pay with a cheque because... well that is what HE is used to do. and European Millionaire-investors pay with an INVOICE as THEY are used to do.

We need to make it VERY EASY for Investors (who just want to invest, stake and hodl) to get in.

I've been watching people tenatively test the waters of bitcoin for a few years, but they tend to be either incredibly tech savvy, incredibly ancap, or both. But I'm seeing people learning the ways of Steemit and its platform who lack those two traits. Their incentive is their own self interest, their own ability to create wealth. Do you think steem could ever eclipse bitcoin for this reason?

Openbazaar uses bitcoin (which has a lot more users than steemit) and the market only have an average of 8 transactions per day and its been around for months.
Now if you integrate a marketplace on coinbase.com you will see that the market's traffic will be huge compared to openbazaar because you use coinbase customer base directly.
That's why the marketplace should be on steemit.com otherwise very few people will use it.

@charlieshrem Regarding the price you can read my latest post and you will understand why the price is only going to go down from there, it might go up because of a bubble but it will shortly after get back to a slow downtrend. Basically there is no incentives to stay powered up. Whales who have been powering down continuously for months have a lot more steem power than when they started cashing out, the system provides people with unlimited ressource to suppress the price of steem.

Whales who have been powering down continuously for months have a lot more steem power than when they started cashing out, the system provides people with unlimited ressource to suppress the price of steem.

Yes, they have alot more SP than before but also they have less percentage of the "total pie". With each power down their "pie share" keeps decreasing.

Selling 1% of your Bitcoins per week or Selling 1% of your STEEM per week is the same thing. STEEM is just a little bit more "complicated".

Correct, i've been talking to several friends and coworkers about steem and bitcoin and the possibilities with these. But when i'm explaining the hassle of wire transfers to obtain bitcoin through localbitcoins it's off putting, it's first after these massive steps you can acquire other crypto's such as steem.
It's a trust system that takes...way to long.

In the ideal world...if I could just whip out my credit card and buy some SteemPower (on a really cool sales page with a video showing the benefits) then this thing would take off. I would put that video in the guiding tutorial that people go through after signing up. (dropbox style)

but since Steem Power can't be powered down immediately removes the fraud issue.

No, it doesn't , unless there is also a way to "charge back" the purchased steem power once the credit card gets charged back.

Yes, a fraudster won't be able to immediately monetize by buying steem power then charging back and selling his illicitly purchased steem power for cash, he would still be able to get full value and use from it (as well as selling powered up accounts)...

I kind of looked into it, and Its doable if you had the right sort of merchant account and a pretty robust anti-fraud system.... but it would be risky as all get out because if someone figured out a way to game you, they could take you for quite a bit fairly quickly.

Great point. Is the fraud issue credit card related only, or is it the same if entering a routing number and checking account (like a Coinbase account)? I'd be really happy right now with a "USD bank account-to-Steem" method of purchasing, esp if accompanied by a debit card that let me spend from my Steem balance. I'd even agree to a waiting period required before being able to convert purchases of Steem back to USD in my bank account. I'm pretty confident Steemit Inc and the community will get this figured out, so I'm not even dealing with the exchanges at all any more (once was enough, too complicated for me and many others). I'm just waiting for the community to figure it out and post an ez-peasy link.

First of all from those 95k accounts, 10k are 'real' accounts with a small number of STEEM. See latest GOLOS post for the exact number. Second, I suspect that a few hundred accounts out of those 10k are owned by a few people who run upvote bots. See patterns of upvotes for your post. I can discover similar patterns in my posts that were profitable. Third, most of the people are ignorant even if you write the truth in capital letters. See my last post and number of upvotes. I did not count of any big reward of this one but the information provided there may have been worth a few hundred bucks for each whale account and there was absolutely no mention of that anywhere. Having said that, my view on quick steemit growth is to create a bookie based on bet-at-home, bet365 or similar with bets and rewards denominated in STEEM and converted to fiat. This is fairly easy to achieve from the technical side and would be a true accelerator and a huge source of revenue but someone with steel balls would have to open a llc somewhere in cayman islands or cyprus and hire a few good lawyers before launching it online to avoid the obvious. Good night.

Somehow I didn't know that Erik Voorhees was involved in BitInstant. I guess I haven't been around long enough.
Cool post. Steemit has a high percentage shot of making some big waves in my opinion. We will see what happens though.

Yes, two-way fiat gateways would be really helpful. If only those AML/KYC regs didn't make it hard these days...

As for using STEEM and SBD as real currencies, that is where the long-term success comes for any cryptocurrency. Unfortunately, the only proven success along these lines has come from use in dark markets. So far, this use case is the only one compelling enough to break people's fiat habits. Since there's no self-evident tie to Steemit with these markets, this avenue doesn't look fruitful.

On the other hand...there is a future use case that goes hand-in-glove - or tree-in-seed - with Steemit. It's only a matter of time before the Steemit ecosystem gives birth to at least one author that hits in big in mainstream markets. It'd be fantastic if that author volunteered to sell one of his/her new & original works solely for SBD! Given the help-the-minnows initiatives I've seen 'round here, it's certainly plausible that a "Steem-Grown" author would agree to do that.

You might be onto something here. Imagine the publicity if an author like Stephen King decided to publish his next story exclusively as a Steemit mini-series... he actually did something like that for Amazon Kindle, writing some short stories specifically for Kindle users to promote the platform.

Yes, that would be even better! There are indeed a lot of good writers here, so I wouldn't be surprised if some of them become well known authors. Maybe one of them will write a book about Steemit and how the platform gave him or her the chance to succeed in the literary world.

I think creating markets where people transact in Steem and SBD is the single biggest driver of Steem prices moving up. That and getting many more active users on Steemit.com.

But, like you mentioned... allowing for users to go directly from Steem or SBD to fiat currency will only increase people's confidence in the currency and will encourage them to use it more often as well.

Great points by the way. None of us know what is going to happen in the future. I'm continuing to power up over time and just tonight after having a great earning on my FAQ post I decided to add some of my own crypto earnings in and get myself up to 11K SP - which is a huge amount of money for me.

I don't have a crystal ball but I do believe in this community and I have been using my own money to steadily power up. Further I haven't taken any money off the platform and I've been using my SBD to promote other peoples posts as well as my own and keep regularly powering up in small increments. This way I spread my price in case the Steem value falls further.

I think what could create some tailwind is promoting some of the good Steemit content here (and its rewards) to external sources, linked with all the possibilities Steemit offers.

Here is what I achieved by just tweeting Steemit articles: I received over 500.000 tweet impressions for Steemit articles -> considering this was achieved with no Penny spent but just a bit time, the outreach of a proper and payed marketing campaign using quality content of Steemit could be truly significant and could boost the interest, account numbers and the general acceptance of Steem.

Nice post about STEEM price! I see you still have room for one more tag in your article. Can you add the #usesteem tag? since you say "We need markets where Steem/SBD can be used exclusively", which is something we are trying to do with #usesteem.
Regarding #2, there is little we can do to control in an open and free market, other than focusing on #1, speculators will always be there.
-- @develcuy

Great post. Upvoted and resteemed. They should consider other ways to increase the growth. We should never be satisfied with what we have. Sky is the limit. Satisfaction is death. You cannot stop the water to flow, water always finds and makes it path. We should learn from this things of nature. Change is good, big and better.

Dash looks to be leading the way on most of these points already, im still a noob but could easily buy with fiat, they are putting out a almost paypal approach. They are working on a new wallet which as they say "your mum could use" as well as a market.
Still Steem has a one thing over Dash, being steemit which gives the currency a reason. Hopefully something will grow with all the good and made easy for non-techies. Still im in both as sooner or later BTC will cease to be the crypto reserve currency and someone else is going to the moon =).

Really nice writeup @charlieshrem everyone always talks about how fast crypto moves, but in reality things take time (as the have with bitcoin). Development here is wonderful, there are so many people working on so many different projects that may bring more value to the steem block chain. Now is the time to focus on helping this community (exactly as you are doing). The rewards could be massive, you just have to think longer term then the weekly trading candle.

Good idea,
Also, good idea will be to make some steemit-credit card what will help regular steemians to cash-out their assets without making lot of passes on exchanges.
And maybe need to make some interactive application inside steemit platform what can burn some amount of steem or sbd. something like change theme, make some achives, games and etc. where the accepted funds will be automatically converted and send to @null account.
but I'm not sure what it will have a big effect.

People need to look at the thousands of other altcoin charts and steem. Bitcoin is the exception, not the rule here. When you look at those charts, ask yourself if any of them were creating more coins when people power up. Now look at those altcoin charts that I mentioned, and look at when they go down and what the bitcoin price was doing. Generaly when bitcoin goes up, alts dump and when bitcoin dumps altcoins go up.

Regardless if I can buy a cookie with steem dollars, steem or steem power or not, if the content is not good who cares?

There needs to be more content that is not about steem.
The issues at launch with regards to mining need to be revisted and clarified.
As long as whales can control what goes up and what goes down in the content feeds lets not kid ourselves about being decentral.
Why should I buy steem and power up?

I love to see an influent member like you talking about this. You are the one that should start talking often about how importamt is to keep the STEEM in the system by using it actively for buying phisical stuff from merchants that are investing in this platform. Also, you could propose something like #thegreencandle (we started this but not with enough exposure) - let's propose a week without STEEM selling on the exchanges! Let's create plugins for all shopping platforms and support systems like Coinpayments to add SBD and STEEM. You have the power! The rest of us, we are to small to propose...let's give STEEM a boost!

To the Bitcoin maximalists, I'd also point out how important competition is. We're already seeing attempts to regulate and control Bitcoin, and plenty of crypto users are very vocal about not wanting those things, so it's good to have options. :)

@charlieshrem, you seem well versed in this. Perhaps you can help me.
If the steem price shoots up dramatically like bitcoin did a few years ago, will our Steem, Steem Dollars, and Steem Power all dramatically increase too? Or simply the value of our accounts?

Yes, making the acquisition of Steem an easy process that your everyday person with a limited knowledge of the blockchain technology can participate in is a priority. People don't need to understand how it works but rather what Steem can do for them and they need easy access to Steem to get started. I think we are just at the beginning of the revolution that is cryptocurrency and there is room for more than one player...move over Bitcoin!

Very good disucssion. I was about to start a similair discussion. The current total market cap of all cryptos might seem high but blockchain is here to stay and will involve all our lives. I do see a bright future for everyone that's hold's their coins with a long term vision. This is quite an interesting website I found: https://www.coincheckup.com Since I use this site I make so much less basic investment mistakes. Check: https://www.coincheckup.com/coins/Steem#analysis For the Steem Analysis.